The water scarcity issue is becoming a critical issue to the climate change, industrialization and urbanization. Prompt to the advances in biotechnology, Oleaginous microorganisms have been discovered and successfully applied in biological wastewater treatments, which are highly effective for wastewater clean-up and energy efficient lipid conversion to value-added products. This paper aims to review the recent advances of the application of different types of Oleaginous microorganisms (e.g. yeasts, microalgae, and fungi) as well as the advantages, limitations and application fields (food industry, municipal waste and chemical plant). The future prospect and challenges of Oleaginous microorganism that warrant in environmental settings or engineered systems are also highlighted in the review. In order to improve the Technology Readiness Level (TRL), the future research direction should be more focussed on the economic and environmental studies.